Performance of the Manufacturing Industry During Transformation

CERGE-EI Working Paper Series No. 50

35 Pages Posted: 26 Feb 2010

See all articles by Marie Bohata

Marie Bohata

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Michal Michal Fischer

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Date Written: April 1, 1994

Abstract

The aim of this paper is to analyze the ongoing effects of macroeconomic policy and changes in both the institutional arrangements and the market environment upon the structure and performance of manufacturing industries in the CSFR and the Czech Republic. Restructuring processes are analyzed from the point of view of reallocation of resources, as well as efficiency of resources given their allocation. For these purposes, two different methodological approaches are implemented: production functions and multicriterial evaluations using parameters such as: value added, net productivity, export-sales ratio, etc. The analysis suggests that the general result of the Czechoslovak (Czech) industry is driven by a major diversity in individual enterprises. An assessment of the main indicators of performance, i.e. labor productivity and export performance, shows that the effects of transformation have not occurred to a more substantial extent. This is true mainly for skilled labor which is viewed as the most important comparative advantage of the Czech economy. On the other hand, the industries with the highest performance appear to be those whose development should be curtailed, i.e. iron and steel industry and heavy chemistry. Surprisingly, the industries which form an underlying profile of the Czech industry, i.e. machinery sectors, have seen a decrease in their performance. Analytical results indicate that a successful resolution of some the crucial problems is clearly beyond the capabilities of the market and requires governmental action.

Suggested Citation

Bohata, Marie and Michal Fischer, Michal, Performance of the Manufacturing Industry During Transformation (April 1, 1994). CERGE-EI Working Paper Series No. 50, Available at SSRN: https://ssrn.com/abstract=1558105 or http://dx.doi.org/10.2139/ssrn.1558105

Marie Bohata (Contact Author)

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

Michal Michal Fischer

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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